With effect from 1 April 2017, Horizon Networks will increase its line charges to consumers by 6.1%. This is a weighted average change across the various consumer groups.
This increase will have a varied impact on the different consumers groups. The approximate change per average consumer shown in the table below.
The prices charged by Horizon Networks are regulated by the Commerce Commission (“Commission”) and have been set in accordance with the Commission’s approved allowances.
The increase in prices is substantially driven by the significant increase in charges that Transpower New Zealand Limited (“Transpower”) has levied across the industry. Transpower, the state owned national grid operator, transmits generator produced electricity over a system of extra high voltage power lines that enable power distribution across New Zealand.
According to Transpower, the increase in charges is primarily due to the increased revenue requirement for the High Voltage AC (“HVAC”) transmission network. This has subsequently led to an 8.1% increase in the interconnection rate payable by Horizon Networks to Transpower and other Eastern Bay of Plenty generators.
Forecast HVAC transmission network revenue, according to Transpower, is expected to fluctuate over the next few years but decline in real terms. In addition to Transpower’s forecasts, the Electricity Authority is currently consulting on transmission pricing methodology changes which could increase prices and will create more volatility and uncertainty in the Transpower component of our pricing in future years. Hence, it is unlikely these charges will decrease significantly in the near future.
For more information please refer to the Horizon Networks Pricing Methodology found on www.horizonnetworks.nz/information-disclosure-regulation.
Alternatively, please contact us on 07 306 2900 to request a printed copy.